The ISEQ is steady this morning at 4,862, up 8 points as European markets opened lower in early trading on Chinese data indicating a slowing of historic growth levels.

The Euro Stoxx 50 fell 0.1pc on Wednesday while the S and P 500 rose 0.1pc. With few macroeconomic data releases to guide sentiment, investors focused on corporate earnings. The news that the UK unemployment rate fell to 7.1pc in November surprised markets, with sterling trading at its strongest level against the euro for 12 months at 81.8p. UK gilt yields briefly rose above 2.9pc and with markets now pricing in a rate rise to 0.75pc from the Bank of England by January 2015.

As we pointed out yesterday, the market consensus for a 7.3pc rate in November looked too pessimistic, given the single-month estimate had fallen to 7pc in October. However, the minutes of the Bank of England’s January policy meeting indicated that the MPC saw no immediate need to raise bank rate even if the 7pc unemployment threshold were to be breached in the near future. The MPC also indicated that when the time came to raise bank rate, it would be appropriate to do so only gradually. Clearly, the MPC is still minded to keep bank rate at 0.5pc for now, especially with CPI inflation currently at the 2pc target.

Irish residential property prices for December are released this morning. In November, house price inflation was 5.2pc, albeit starkly split between a 13.1pc rise in Dublin and a -0.4pc fall outside the capital. Prices fell for four consecutive months from December 2012 as the positive impact of the expiry of mortgage interest reliefs unwound. But these falls will now fall out of the annual comparison in early 2014. So, house price inflation should reach double-digit levels by March.

The bigger question is whether rising prices will be accompanied by a pick-up in transactions and mortgage lending. For now, prices have been supported by a lack of supply, reflecting banks’ slow progress in dealing with delinquent mortgage loans. Mortgage lending looks set to decline in 2013, at around E2.2bn, down from the E2.6bn recorded in 2012 and with cash buyers accounting for over 50pc of transactions according to Davy Stockbrokers. Source: Business and Leadership.